You know,[the wealthiest] were paying the higher rates during the 1990s when President Clinton was in office, and we enjoyed boom years in the states. We had the highest real per capita family income in 1999 than we’ve had in our history. Since then, we’ve dropped almost 9 percent from that high in the aftermath of the Minnesota tax cuts in 1999 and 2000, and also the Bush tax cuts in 2001 and 2003.” – Gov. Mark Dayton”

You don’t have to be a economist, or even a conservative, to understand where this is wrong. You merely have to be somewhat curious, and care a little bit about history.

Richert’s response:

Dayton made this statement in response to a question about Republican concerns that a state tax increase on the wealthiest to close the budget gap, which has been a priority for Dayton, and the expiration of the Bush-era tax cuts on the federal level would hurt the state’s economy.

Dayton was arguing that their logic is flawed because tax cuts don’t always correspond with a strong economy.

Now, I’ll give Catherine Richert the benefit of the doubt; as a self-styled “fact-checker”, she’s hobbled by needing to refer to other “Fact-checkers”, the WaPo and the woefully-misnamed “Politifact”, whose institutional bias in these matters is itself a fact:

It’s true that the wealthiest paid more in federal income taxes during the Clinton years. Clinton raised the top marginal rate from 31 percent to nearly 40 percent. It also happened to be a time of strong economic growth, partly because of Clinton and George H. W. Bush’s broader fiscal policies, which lead to lower interest rates and lots of activity on Wall Street, as reported by the Washington Post and PolitiFact.

Well, if the WaPo and Politifact say so. The paragraph itself shows the extent to which MPR’s reporting on the subject is based on the major media’s narrative; those “broader fiscal policies” involved a very pro-business climate, tax hikes notwithstanding.

Richert, the WaPo, Politifact, and Governor Messinger Dayton glossed over – or didn’t know – the larger historical causation for the correlation:

Clinton got to cash Reagan’s “peace dividend”

Gas prices were around a buck a gallon,

Clinton raised taxes, it’s true. But a GOP Congress didn’t let him raise them nearly as much as he’d wanted to, not to mention defeated his attempt to socialize healthcare, and forced Bubba to govern, tax hikes notwithstanding, as a conservative (especially relative to Dubya’s spending). Remember how liberals squealed about Clinton’s “conservative” nature? Back when Minnesota liberals spoke about the “Democratic Leadership Conference”, the moderate, pro-business Democrat caucus, the way they talk about the Koch brothers today?

Let’s go back Messinger’s Daytons’ statement.

As stated, it was a strawman; of course tax cuts don’t always bring prosperity, not by themselves. And tax hikes don’t always gut the economy – provided the other fundamentals are working. In the nineties, the other fundamentals of the economy – energy, capital, investment climate, relative levels of regulation, fairly conservative legislative branch, world markets – were humming right along.

That is just not the case today.

Correlation does not equal causation. It’s a maxim of logic.

But not of “fact-checking”:

George W. Bush slashed those tax rates; Minnesota lowered its tax rates around this time, too.

Assuming Dayton is talking about the national decline in real household income – real per capita family income doesn’t exist – it’s true that it took a 9 percent nosedive after 1999, according to data from the U.S. Census Bureau.

Right.

But not as a result of the tax cuts.

Which was what Dayton’s statement – intended as red meat for the low-information voter that is Dayton’s main constituency – insinuates.

13 thoughts on “Standing Pat”

It should be obvious to anyone with a brain that taxation decreases the amount of capital available for investment, and investment is a necessary but insufficient cause of economic growth.
It is true on both micro and macro economic scales. Look, if you put your money in a bank account that earns 3%, it does not mean that your wealth will increase — you could withdraw the interest earned each year and burn the currency — but if you put your money in an account that earns 0% your wealth will never, ever increase no matter what you do.
Jebus, where do they get these people?

On a somewhat related note; ya’ gotta love it when the minions don’t get the memo. Yesterday, Dip stick Dayton announced that the reason the roads were in such poor shape was due to budget cuts. MNDOT Officials honestly replied; “Budget cuts had nothing to do with it. The issues were strictly due to the high ground temperature when the snow started falling, the high amount of traffic that packed it down and the volume of snow that fell over a several hour period!”

And another thing!
The prosperity and high economic growth of the 90’s was driven by technology that increased the efficiency of production. Not only is this unlikely to be repeated, regardless of tax policy, it was achieved by outsourcing production overseas and reducing the number of people required to produce the same output. These are policies today’s democrats — including Obama — oppose.

Democrats believe high taxes on the rich made the economy boom so deserving folks prospered, followed by low taxes on the rich that made the economy crater. Plainly, if we raise taxes on the rich again so we all will get rich. And when we’re rich, we’ll all pay high taxes which will make the economy boom even harder so we all will get even richer and pay even more taxes . . . .

People forget that part of the good economic times in the late 90’s were due to the capital gains tax cuts of 1997, pushed by the Republicans and signed by Clinton. Liberals somehow always forget and say “Clinton raised taxes.”

. . . and Bill Clinton very proudly signed the Gramm-Leach-Biley act that repealed Glass-Steagall, The Gramm-Leach-Biley act was supported by large, bipartisan majorities in both the House and the Senate.

So, if I get everyone’s point, could it be said that Clinton benefitted from a body politic (Clinton included) that could think and arrive at compromise?

That seems to be the missing element since he left office. The left and the right – in Congress and the White House – spend more time talking past each other than they do talking to each other. They spend more time analyzing their opponents’ motives than they do thinking about their own.

…And we elected them to office.

Yes, we have all – it seems – become experts at finding toothpicks in each others’ eyes…

So, if I get everyone’s point, could it be said that Clinton benefitted from a body politic (Clinton included) that could think and arrive at compromise?

No. It’s that when Clinton compromised, it was to the right – because the right held all the legislative cards after 1994.

“Compromise” is only a virtue in conjunction with “negotiation”. And the left hates it when we negotiate. Not that Republicans negotiate all that well lately. See Boehner, now, and the GOP caucus during the stadium debate.

That seems to be the missing element since he left office. The left and the right – in Congress and the White House – spend more time talking past each other than they do talking to each other. They spend more time analyzing their opponents’ motives than they do thinking about their own.

It’s never really been any different.

And the eras that the media babble about in the past when people did “compromise?” It was because one part had a prohibitive advantage.

BTW, for all the “compromising”, politics in the ’90s was incredibly nasty. People forget that.

So, if I get Leslie Hitner’s point, could it be said that the US benefited when the body politic when everyone arrived at a compromise that was 95% of what the Democrats wanted?
Yes, those good old days. When the Republican Minority Leader was Bob Michel, (R., Caterpillar). Bob’s main concerns were (in order): Good Tee Times at Congressional Country Club; Highway Spending Bills that Benefited his Constituent, Caterpillar; and Majority Democrats Politely Closing and not Actually Slamming the Door in the Face of Minority Republicans Attempting to Attend and Participate in Committee Meetings.
See, that’s the problem with the wing-nuts. They don’t understand that everything was great in this country after WWII because Democrats were in control of the Congress. Contrary to Berg – Correlation does equal Causation. And if it doesn’t, don’t forget Nicholas Kristof’s grand excuse – “granted other factors are also at work”.

Seflores, you can’t get my name right, much less what I said. There is evidence throughout our society – on the left and on the right – that “negotiation” has been turned into “rhetoric” and that “science” has been spun as just another “belief.” Rhetoric is about winning an argument not arriving at truth. It’s the language of lawyers. Let’s look at just a few places where two sides are “locked” like a battle of two elk bulls:

1. The continuing saga of the Crystal Sugar Company lockout
2. NHL and the players union lockout (About to happen twice?)
3. SPCO musicians’ lockout
4. Minnesota Orchestra musicians’ lockout
5. Obama and Boehner
6. The need to take failed Minnesota legislative initiatives to the people
7. Lack of a budget proposal from the US Senate
8. The science of climate change vs. the rhetoric of climate change
9. The science of evolution vs. the rhetoric of evolution
10. Gun ownership and carry issues
11. The abortion debate

The two partisian sides these days seem more often locked in unending rhetorical arguments that fail to look at the science of the issues when appropriate and fail to acknowledge that both sides can be differently “correct” on social issues. Both types of failures prevent possibilities of compromise and solution.

I blame conservatives and liberals for these failures. It seems both sides are now looking for only the “perfect” solutions to problems. Thus, the iterative social solution method built into our democracy is not working so well these days.

I don’t know about the rest of you, but I’m not comfortable with that.